In September 2013, Sir Richard Lambert was invited by the Chairman of the UK’s biggest banks and building society to develop plans for a professional body to promote high standards in banking.
In February 2014, a Consultation Paper was published which set out initial thoughts that generated nearly 200 responses. Following this consultation, Sir Richard has now published a report setting out recommendations for an independent Banking Standards Review Council (BSRC).
Key recommendations in the report include:
- the BSRC should be established with the aim of contributing to a continuous improvement in the conduct and culture of banks and building societies doing business in the UK, and of supporting high standards in the future;
- the governance, funding and reporting arrangements of the BSRC should underwrite its independence and credibility;
- the BSRC should engage with banks and building societies, rather than with their individual employees;
- the BSRC will complement the work of the PRA and FCA by focusing its efforts on identifying and championing good practice; and
- the BSRC should work with the industry and its wider group of stakeholders to identify specific areas of banking activity where voluntary standard setting would benefit customers and advance the public interest.
The report states that the aim should be for the BSRC to start taking shape in Q4 2014. Among the BSRC’s early priorities will be the need to:
- agree with the PRA and FCA how best to align the BSRC’s work with theirs, and to design a high-level code of practice for the banking industry;
- start developing the framework and capability for assessing individual banks and building societies; and
- establish practitioner panels with a view to identifying where standard setting would be most appropriate.
The report also states that the BSRC should aim to publish a full report on the state of banking standards and good practice in the first half of next year. This will set out its priorities for the following 12 months, and provide the starting point for its first annual report in 2016. In addition, next year the BSRC should also start identifying and publishing examples of good practice in the industry, and begin to work on its priority areas for standard setting.
View Banking Standards Review report, 19 May 2014